2014 Sustainability Report

Transcription

1 2014 Sustainability Report

2 Contents Our Business Chief Executive Officer s Report 2014 Highlights Mining and Metals in Our Society Strategy and Management Approach In Focus: Port Pirie Redevelopment In Focus: Resource Recovery In Focus: Preventing Major Harm Performance Review How We Report Auditor Report Appendix A: Summary Data Table Appendix B: GRI Index Cover Image and above: The facade of the Nitehawk Cinema in Brooklyn features LED illuminated zinc panel. Nitehawk Cinema Images - Ty Cole/OTTO 2 of 56

3 Our Business Myra Falls Operation Mining & production of zinc, lead & copper concentrates; silver & gold as byproducts Site employees 365 Location Canada Langlois Operation Mining & production of zinc & copper concentrates; silver & gold as byproducts Site employees 268 Location Canada Høyanger Operation Fuming of zinc residues Site employees 32 Location Norway Budel Operation Zinc smelting & alloying Site employees 463 Location The Netherlands Balen / Overpelt Operation Zinc smelting, alloying & oxide washing Site employees 557 Location Belgium Nyrstar is an integrated mining and metals business with market leading positions in zinc and lead, and growing positions in other base and precious metals. Nyrstar has mining, smelting and other operations located in the Americas, Australia and Europe, and employs approximately 6,600 people. Tennessee Mines Operation Mining & production of zinc concentrates Site employees 915 Location USA Clarksville Operation Zinc smelting & alloying Site employees 253 Location USA Campo Morado Operation Mining & production of zinc & copper concentrates, silver & gold as byproducts Site employees 367 Location Mexico Peru Mines Operation Mining & production of zinc, lead & copper concentrates; silver & gold as byproducts Site employees 442 Location Peru El Mochito Operation Mining & production of zinc & lead concentrates; silver as a byproduct Site employees 835 Location Honduras El Toqui Operation Mining & production of zinc & lead concentrates, silver & gold as byproducts Site employees 418 Location Chile Auby Operation Zinc smelting Site employees 298 Location France Port Pirie Operation Multi-metal smelting Site employees 742 Location Australia Hobart Operation Zinc smelting & alloying Site employees 486 Location Australia Site employees are as at 31 December of 56

4 Chief Executive Officer s Report Heinz Eigner Acting CEO and CFO A Strategic and Integrated Approach The purpose of the mining and metals sector is to provide the metals and minerals that are needed by society to develop and progress. The challenge is to do this in a manner that is simultaneously environmentally, socially, and economically sustainable and that adds value not just to our shareholders but to the local communities and regions where we operate. We also want every employee and contractor who works for us to go home from work safe and healthy every day. Defining, and delivering on, our sustainability commitments and objectives requires that we engage actively, and in good faith, with concerned stakeholders at the local, national, international level - to understand how we can best add value and collaborate to do so. It requires that we fully integrate sustainability considerations into our core business decision-making processes and that we take both a short and long term view. Last, but not least, it requires that we have highly effective and consistent risk management processes in place. Mining and smelting operations are hazardous by nature and achieving our objective of avoiding harm to people, communities and the environment means we must ensure that these hazards are properly identified, eliminated where feasible, or otherwise carefully managed to minimize the associated risks. In this report, we focus on the sustainability aspects that are most material to our business and our operations. The report highlights our progress in 2014, discusses some of the challenges we face, and shares what we have learned during the year Milestones From a commercial perspective, 2014 represented another challenging year for the metals and mining industry as the world economy continued to struggle to gain momentum. Whilst this certainly impacted our business and we also faced our fair share of operational challenges, we found a lot to be excited about in In particular, we continued to lay the groundwork for the delivery of our core business strategy which is simultaneously driving improvements in our sustainability performance. As a key part of our transformation journey to a fully integrated mining and metals business, in 2014 we made the decision and secured the financing to redevelop our Port Pirie smelter into an advanced multi-metal recovery facility. The AUD514m redevelopment of our Port Pirie operations has avoided the probable closure of the plant and will sustain more than three thousand direct and indirect job opportunities in region. The new, state-of-the-art smelting process technology being installed at Port Pirie will significantly reduce the site s environmental footprint not least in terms of lead and S02 emissions to air. In combination with the community lead exposure reduction programmes delivered in collaboration between Nyrstar and local authorities, the emission reductions will help achieve a further step change in community health in terms of blood lead levels amongst the local population, especially children. Our portfolio of growth projects also presents a key opportunity for sustainability improvements. As an outcome of our Smelting Strategic Review (SSR) in 2012, these projects are helping us to capture additional minerals and metals from the ores that we mine and, consequently, to reduce our waste arisings. In 2014 we commenced the upgrade of our new fumer plant in Høyanger, Norway, which will, in addition to zinc, lead and copper, allow it to capture indium, germanium and other minor metals which can then be sent to and refined in other Nyrstar facilities. As we continue to deliver our SSR growth projects, sustainability will provide a key value driver stimulating innovation and helping us to find resource efficient solutions of benefit to our competitiveness as well as our environmental performance. Safe and Responsible Operations In 2014, we focused a lot of resources and attention on strengthening our processes around those elements of our business that have the potential for major harm; to our people, the environment and the communities in which we operate. In terms of safety, we expanded our Life Saving Rules initiative and developed it into a comprehensive fatality prevention programme which we call The Zero Program. It encompasses a series of activities including identification and review of critical incident scenarios, first line supervisor leadership training, audit and self-assessments and further. 4 of 56

5 Chief Executive Officer s Report I am pleased to report that Nyrstar had no fatalities in However, our Lost Time Injury Rate (LTIR) and Recordable Injury Rate (RIR) remained similar to previous years, indicating the need for continued attention and effort on creating and maintaining safe and healthy workplaces. From an environmental perspective, we set up a Dam Safety Review Committee with a mandate to monitor the physical integrity and safety of our tailing dam portfolio. As a first order of business, the Committee commissioned experts to conduct a round of dam safety reviews across all major tailing dams. More details about these reviews can be found in the In Focus section on page 30. For our sites where freshwater resources are scarce, we continue to find innovative ways of reducing their water footprints and collaborating with local stakeholders to ensure equitable solutions. In 2014, our sites were focused on developing integrated water management plans. Once these are fully implemented in 2015, it will help the sites lower the amount of water needed by their processes as well as capture and recirculate water so that they are able to further reduce their net demand for water. Local Communities Our aim is that wherever Nyrstar operates it is welcomed as a valuable and trusted partner by local communities. This means engaging and collaborating with stakeholders to understand how we can deliver sustainable, long term benefits to the communities affected by our operations. For example, we preferentially source from local suppliers and help them to build capacity to take on bigger and more complex contracts. We help build local capabilities and knowhow and, where we can, we work in collaboration with local stakeholders (governments, education boards, local medical providers, etc.) to support the improvement of education and local community health. In the past year, our community engagement programmes supported initiatives related to children s health, educational and training opportunities, habitat & wildlife protection, local community business management capability, and cultural and sporting events. Looking Forward We recognise that much remains to be done and that fully integrating sustainability into our business management approach needs time. As we continue our journey into 2015, we are looking forward to revisiting our sustainability strategy and to consolidating the many management programmes and initiatives introduced over the recent years. We will also be working to support our Mining segment in its efforts to achieve the robust sustainability performance already attained by our Metals Processing segment. 5 of 56

6 2014 Highlights Lead in air concentrations at Port Pirie improved by 40% relative to 2013 No fatalities or permanent disabling injuries No environmental incidents with significant business consequences or long-term environmental impact Community financial contributions increased by 6% to 3 million Rolled out a Leadership Development Programme focusing on front line and mid-level leaders in our Mining segment We reduced our total greenhouse gas emissions by 160,000 tonnes, or 6% relative to 2013 Made investment decision to proceed with the Port Pirie Redevelopment, supporting continued socioeconomic viability of the Port Pirie community and providing for step change improvements in site environmental performance and community health Implementation of Critical Incident Prevention Programme complemented by a set of Mining Golden Rules Tennessee Mines achieved certification to the ISO environmental management system standard and Clarksville smelter was certified to the OHSAS occupational health and safety management standard Third party Dam Safety Reviews completed at all major tailing storage facilities Safety statistics in the Metals Processing segment improved significantly relative to 2013 including a reduction in lost time injury rate by 34% (to 2.7) 6 of 56

7 Mining and Metals in Our Society Metals have played a central role in the development and improvement of society and they will play an even more important role in helping us shift towards more sustainable patterns of production and consumption. For example, Nyrstar s primary metal product, zinc, possesses a number of unique attributes that position it well as a material of choice for a more sustainable society, including the following. Essential: as a natural element, zinc plays a key role in the biological processes of all humans, animals and plants. It is a vital nutrient that is essential to human health ensuring adequate levels of zinc intake is an important component in efforts to reduce child illness, enhance physical growth and decrease mortality in developing countries. Careful application of zinc to soils and crops can make a significant contribution towards the goals of increased food security and human health. Durable: by protecting steel against corrosion, zinc greatly extends the life and durability of steel and the many structures (buildings, bridges, etc.) and products (vehicles, lampposts, roofing, etc.) that are made with steel. No other material can provide such efficient and cost effective corrosion protection for steel. Recyclable: zinc can be recycled infinitely without loss of properties and quality. Whilst overall recycling levels depend much upon the collection rate of end-oflife zinc-containing products and materials, over 90% of these collected products are recycled and the zinc recovered. At present, approximately 75% of the zinc consumed worldwide originates from mined ores and 25% from recycled or secondary zinc. However, the levels of recycling are steadily increasing each year. The mining, smelting, and refining of metals tends to be energy and resource intensive and, if not carefully and responsibly managed, can lead to significant, negative environmental and social impacts. Yet, we believe it is possible to envisage a mining and metals sector that operates within the carrying capacity of the environment, protects and even enhances biodiversity, uses low-carbon energy sources, manages its risks and operations so that major accidents and spills are things of the past, and enhances the social and economic vitality of the communities and countries where it operates. As a sector as a whole, there is still a lot of work to do to achieve this vision and some of it will require other stakeholders to work with us and do their part - for example in terms of how the metals we produce are used, recovered and recycled. The mining sector globally is also facing the challenge of ore bodies that are increasingly difficult to access (in a physical, geological sense) and/or are of increasingly lower ore grade quality. This means that without significant innovations to mining practices, processing technologies, environmental controls and stakeholder management approaches, sustainability improvements could stagnate and even reverse. Whilst zinc, and to a lesser extent lead, copper, gold, silver and sulphuric acid are the main focus of Nyrstar s mining and metals activities, we also capture and produce a number of useful by-products including rare-earth metals such as germanium and indium. Following an in-depth strategic review of our smelter operations in 2012 and 2013, we have been busy during 2014 re-imagining, redesigning and making major investments in a number of our smelter sites and technologies. The aim is to significantly improve our ability to capture more value and create less waste from the ore bodies that we mine and smelt and, in the process, improve the overall resource efficiency of our operations. As a global business with operations, sales and marketing activities in many different countries around the world, we make a number of other important contributions to society besides the production of zinc and other useful metals. This includes providing employment and career development opportunities to thousands of people, tax payments and community contributions, and the purchasing of goods and services from suppliers based in the communities close to our operations. 6,611 Number of Employees Globally 3 million Community Financial Contributions 2.7 billion Economic Value Distributed to Society Images: Left - The Earth Sciences Building at the University of British Columbia, constructed with support from Nyrstar, contains zinc and other metals essential to a sustainable society. Below - Our processes capture a range of metals important to society, including indium used in liquid crystal displays (LCDs) and touch screens. 7 of 56

8 Strategy and Management Approach How We Manage Sustainability We are committed to responsible and sustainable business practices. This protects and enhances our global licence to operate and it helps to make our business more resilient and competitive. Managed responsibly, our products and operations can make a number of positive contributions towards helping society shift to more sustainable production and consumption pathways. Nyrstar s sustainability strategy is to: Engage to Prioritise: to engage with a range of relevant stakeholders including customers, local communities, civil society organisations, government authorities, employees, academia, and suppliers in order to help us assess our external and internal contexts and to understand what we need to focus on in terms of sustainability issues and risks as well as opportunities to innovate. Eliminate Major Hazards and Rigorously Reduce and Manage Risks: to ensure that our businesses and operations consistently and properly identify, understand and, whenever feasible, eliminate their major health, safety, environmental and social hazards or otherwise control the associated risks so that they are reduced to acceptable levels. Cooperate and Innovate: to identify and support the specific opportunities to innovate that allow us to make a positive contribution towards improved sustainability and to distinguish ourselves from our competitors in the marketplace. Integrate: to establish clear accountabilities at all levels of the organisation for achieving our sustainability objectives and to integrate our sustainability ambitions into operational management decisions and processes. This includes a strong focus on performance monitoring and reporting as well as effective governance, assurance and review structures and processes that involve the direct engagement of our senior management team. Our sustainability strategy focuses on the areas and issues that matter the most to our business and our stakeholders, including: Our People: fostering a culture where everyone has the opportunity to reach their full potential and where people are treated fairly. Workforce Health and Safety: providing a work environment where all hazards are effectively identified and controlled, and where each employee takes responsibility for their own safety and that of their colleagues. Environment: continuously improving the efficiency of our activities and production processes with a focus on protecting ecological functions and reducing our environmental footprint, particularly in terms of energy, water and land use, emissions, and waste generation. Community Engagement and Livelihoods: actively engaging with, and helping, local communities to develop, thrive and benefit from the presence of our operations. Our assessment of key sustainability areas and issues is arrived at through a mix of in-house analysis, expert input and on-going consultations with key stakeholder groups. Further information about our stakeholder engagement and materiality assessment processes are provided below and in the How We Report section. Corporate Governance and Business Integrity Nyrstar is committed to sound and transparent governance in accordance with our Corporate Governance Charter and Code of Business Conduct. Figure 1: Overview of Nyrstar Corporate Governance Framework. CORPORATE GOVERNANCE FRAMEWORK Our governance structures provide clear lines of responsibility from the operations through to the Board of Directors. The Safety, Health, Environment and Community (SHEC) Committee of the Board (see Figure 1 below) has the specific mandate to monitor Nyrstar s SHEC performance and the effectiveness of the SHEC control framework. Further details on our governance structures and processes are provided in our Annual Report and on the Nyrstar website at The Code of Business Conduct establishes our commitment to operating with integrity. It applies to all Nyrstar employees, contractors and business partners. BENCHMARKS GOVERNANCE STRUCTURE ASSURANCE Laws and Regulations The Nyrstar Way SHEC Management Framework Enterprise Risk Management Framework Audit Committee Shareholders Board of Directors Nomination and Renumeration Committee Management Committee Corporate Functions and Operations SHEC Committee Audit (internal and external) of financial and non-financial data Group Safety, Health and Environment Audits (internal and external) Risk Audits (internal and external) 8 of 56

9 Strategy and Management Approach How We Manage Sustainability We recognise that the Code cannot describe every situation that our employees and partners may encounter and, to address this, the Code also includes a Framework for Ethical Decision Making that sets out a step-wise process for resolving potential business integrity issues. The Code of Business Conduct is supported by a Development Programme aimed at increasing awareness of ethical issues relevant for our business. The Programme includes a series of training modules designed specifically for Nyrstar and provided by the Nyrstar Compliance Officer. The Code is further underpinned by a Group Anti-Corruption Policy which is supported by an online training programme. The training programme was launched in 2013 with a focus on management level staff in the Mining segment who may be exposed to situations involving corruption. At the end of 2014, 150 employees had completed the online anti-corruption training. The Code of Business Conduct prescribes a mechanism by which breaches of the Code, Group Policies and regulatory requirements can be reported to the Nyrstar Compliance Officer. One human resource related complaint was raised to the Compliance Officer in The complaint was investigated by the Compliance Officer and has been addressed to the satisfaction of the parties involved. No incidents of corruption were reported in Further, Nyrstar was not involved in any legal actions regarding anti-competitive behaviour or violation of anti-trust and monopoly legislation in Nyrstar does not support any political parties and does not make any political donations either through direct funding or assistance in-kind. Safety, Health, Environment and Community (SHEC) Management Framework Our SHEC Framework applies across all Nyrstar businesses and operations and prescribes a common approach to the management of safety, health, environment and community. The Framework is aligned with industry best practice and is continually updated to stay current with the needs of the business and with developments in external standards and requirements. While promoting consistency, the Framework is designed to give operational management the necessary latitude to adapt their implementation strategies to local context, requirements and needs. The Framework is made up of the following components: The Nyrstar Way The Nyrstar Way underpins what we stand for and is central to the way we do business. It establishes a common set of values and guides how we behave. Code of Business Conduct The Code of Business Conduct defines the standards of integrity and business conduct expected of all employees in their dealings with our communities, environment, customers, suppliers, competitors, shareholders and the assets of the company. Group Policies The Nyrstar Group policies on Safety & Health, Environment, Risk Management, Quality and Anti-Corruption establish our commitments to the management of sustainability issues. SHEC Management Elements The Nyrstar SHEC Management System Elements are fully aligned with the ISO and OHSAS standards for environmental and occupational health & safety management systems. The Elements provide a benchmark to which site-level SHEC management systems must be aligned. Technical Standards, Procedures and Guidelines The SHEC Management Framework is supported by several Group standards, procedures and guidelines defining common requirements for the management of safety & health, environment and community issues and risks. The SHEC Framework is supported by Group Assurance programmes for safety & health, environment and risk. The assurance programmes provide assurance to the Board and senior management that safety, health, environment and community risks are adequately managed, that regulatory requirements are being met and that the SHEC Framework is consistently applied across all operations. The programmes also help to identify opportunities for improving Nyrstar s SHEC performance and to share knowledge and good practices between the operations. Risk Management Risk is managed through an enterprise risk management approach which is aligned to the ISO risk management standard. Under our Group Risk Assessment and Treatment Guideline, identified risks are evaluated and prioritised in consideration of a range of potential scenarios and consequence types. Critical risks of significance to the Group, including sustainability related risks, are actively monitored by the Group Manager Business Risk and reported to the Audit Committee of the Board of Directors. Examples of sustainability risks monitored at a corporate level include employee health and safety, climate change including regulatory and physical impacts, tailing dam failure, community and labour unrest with the potential for business interruptions, asset integrity and risks associated with large projects (e.g. the Port Pirie Redevelopment Project). As part of our Group risk management, nine internal audits were conducted in The audits focus on assuring the integrity of critical controls implemented to treat our most significant risks. The audits completed in 2014 included asset management audits at various sites, audits of Nyrstar s key commercial processes, a project management controls audit of the Port Pirie Redevelopment Project and an audit of Nyrstar s largest concentrates warehouse. The outcomes of the audits form the basis for treatment plans to address identified weaknesses in critical controls or risk management processes. Key audit findings and associated responses are reported to the Nyrstar Management Committee and the Audit Committee of the Board. 9 of 56

10 Strategy and Management Approach How We Manage Sustainability Stakeholder Engagement By engaging with and listening to our stakeholders we are able to align our sustainability strategies to society s needs, prioritise the issues that matter the most and create shared value for host communities and other stakeholders. Key stakeholders that we engage with on a regular basis include employees, contractors, customers, investors, regulators and other governmental bodies, suppliers, media, local communities and nongovernmental organisations (NGOs). As stipulated in our Code of Business Conduct, Policies and SHEC Management System Elements, we are committed to engaging with our stakeholders in an open, honest, transparent and culturally sensitive manner. All sites are required to develop Stakeholder Engagement Plans establishing processes for communication, consultation and involvement with external stakeholders. The figure at right provides an overview of some of Nyrstar s key stakeholder groups, their concerns and how we engage with them. Quarterly Results, Regular Media Press Briefing and Teach-ins Engagement - Local & Global, Site Visits, Industry Challenges & Website, Local Media - Radio, Tv, Sponsorships, Relationships, Global Sales, Customer Surveys Safety Data sheets, Website, Customer Townhalls & Internal Communications, Intranet, and Financial, CSR Environmental, Economic Developments, Health & Safety, Employee Assistance Programs, Bottom-up Product Quality and Safety, Sourcing of Feed Materials (incl. Conflict Minerals) Communication & Online Collaboration Platforms, Excellence Awards Media Health & Safety, Development Customers Opportunities, Corporate Responsibility, Strategy, Employee Engagement People Suppliers Quality, Operational Excellence, Ethical Business Practices Global Raw Materials Organizations, Dialog, Contracting Procedures, Supply Chain SHEC Evaluations Environmental Monitoring, Statutory & Voluntary Reporting, Audits and Inspections, Frequent Communications, Incident Reporting, Compliance, Environment Health & Safety Standards, Corruption, Employment, Financing, Energy Taxes, Investments, Legal Permits Government & Regulators Emergency Response Drills Organisations Other Employee Engagement Investors Responsibility, Strategy, Opportunities, Corporate Communities Health & Safety, Development Business Performance, Corporate Governance, Corporate Responsibility, Strategy, Leadership Environment Policies and Stakeholder Engagement Plans, Conferences, Presentations, Outreach Briefings Union Dialog, Trade and Industry Associations, Standards, Social & Infrastructure Investment, Sourcing, Noise, Vibrations, Visits, Graduate Programs, Job Fairs, Steering Groups, Website and Social Media, School Engagement, Site Road Shows, Conferences, Website, Annual Report, Site Visits Environment, Legacy Commitments Key Industry Analyst Dialog, Impact Assessments, Engagement Sessions, Townhalls, Community Partnerships, Dialog, Quarterly Results, Complaints Handling Systems, Social Media, Plans & Monitoring, Site Visits, Roundtables Sponsorship and Donations, Local Environmental External Commitments and Associations As a member of the Mining Association of Canada (MAC), Nyrstar s two Canadian mines, Myra Falls and Langlois, are implementing the Towards Sustainable Mining (TSM) initiative developed by MAC. TSM comprises a set of indicators establishing performance benchmarks in relation to environmental stewardship, communities and people, and energy efficiency. The indicators and associated measurement and reporting processes provide a driver for companies to improve their sustainability performance and reduce risk. Myra Falls has been part of TSM since 2006 and Langlois entered the programme in In alignment with the objective established by MAC, we are striving towards achieving Level A or greater across all TSM performance indicators. More information about TSM and the performance reported by Nyrstar s Canadian operations are available on the MAC website at We also participate in a number of industry associations, working groups and stakeholder consultation forums at national, regional and local levels. Some of our more important industry association memberships include the Mining Association of Canada (MAC), the International Zinc Association (IZA) and Eurometaux. 10 of 56

11 Strategy and Management Approach Our People To achieve our vision of becoming a leading mining and metals business we aim to provide a workplace that is safe, engaging and rewarding for our people and that ultimately makes Nyrstar a great place to work. We foster the development of a culture where everyone has the opportunity to reach their full potential and where people are treated fairly. At the end of 2014, our global workforce comprised 6,611 employees working at 20 locations in 12 countries across Australia, Europe and the Americas. The value proposition to our employees is based on the following key pillars: A Value-Based Culture: We work to promote a non-discriminatory, fair and equitable working culture that is founded on the principles and values embodied in The Nyrstar Way. A Safe and Healthy Work Environment: We strive to provide a work environment where all hazards are effectively identified and controlled, and where each employee takes responsibility for their own safety and that of their colleagues. Providing Opportunities for Training and Development: We offer a range of programmes supporting continued learning and development of our people. Recognising and Rewarding Performance: We provide competitive compensation and recognise employees that make an outstanding contribution to the success of our company. Our Values Our approach to people management is founded on The Nyrstar Way which establishes the behaviours we expect from all Nyrstar employees. Through the principles and values of The Nyrstar Way we are committed to open and honest relationships and we aim to be consistent, fair and transparent in our dealings with our employees. We believe that the Nyrstar Way and the behaviours associated with it will not only support delivery of our key strategies, but also create a culture that attracts and retains talented employees. We are committed to respecting our employees rights in line with the International Labour Organisation s Declaration on Fundamental Principles and Rights at Work. In support of this commitment, we recognise and respect the right of all employees to choose to belong to a union and to bargain collectively. We seek to ensure equitable treatment of all employees and contractors. We do not tolerate any form of discrimination, harassment, intimidation, inhuman treatment, forced labour or child labour in the Nyrstar workplace. We have policies, management systems, training programmes and assurance processes to ensure these commitments are understood and respected. We are strong believers in the power and advantages of a diverse workforce both in terms of ethnicity and gender. We are actively working to improve gender balance at all levels of the organisation. None of our operations have been identified as being at significant risk with regards to violation of fundamental employee and human rights. Developing our Leaders Staff in leadership positions play a particularly important role in shaping the management culture of Nyrstar and the success of our business. In order to equip our mining segment leaders with the skills and capabilities required to sustain and grow our operations, a Leadership Development Programme was initiated in Whilst primarily focused on the development of fundamental leadership skills, the programme also promotes a performance focused culture based on a shared language and common set of operating principles. The programme is aimed at front line and mid-level leaders at our mining operations. Introduced in October 2014, it is expected that over 500 leaders will have completed the programme by the end of During 2014 we also launched a Senior Leader Development Programme aimed at identifying and nurturing high potential leaders amongst senior corporate managers (at management levels below the Executive Committee). The programme is part of a wider strategy to formalise internal succession planning processes across the business. The first round of implementation involves 30 participants who each receive individual development plans, coaching and training in order to prepare for and succeed in future senior level roles. Image: Leadership Development Training participants, Peru. 11 of 56

12 Strategy and Management Approach Our People Training and Development The aim of our people development programmes is to help our employees build their experience, competencies, and skills so that they can realise their full potential and be highly effective operators, managers and leaders of Nyrstar s business. The programmes apply to all levels of staff and include both technical capabilities and management skills. Employee Recognition and Reward Our Group-wide reward and remuneration systems provide for consistent and transparent assessment of performance across all sites and functions. They also support a performance-driven culture by clearly connecting performance to reward and by aligning the priorities of the individual to those of the organisation. Demonstration of the behaviours promoted by The Nyrstar Way is evaluated as part of our annual performance review process and is a key component of our Annual Incentive Plan. Our reward programmes go beyond salaries and also include comprehensive health coverage, competitive vacation allocations, pension contributions and other benefits such as family assistance programmes. Nyrstar s salaried employees are eligible to participate in our Annual Incentive Plan (AIP). The AIP rewards employees based on company, segment and individual performance. Safety and environmental performance are included in the key metrics measured under the AIP. Stimulating Innovation Our ability to innovate is at the heart of the longterm success of our company and is an essential component for improving our sustainability performance. We encourage all our people to share their ideas regarding better ways of doing business, whether it s about identifying new markets, operating in a safer manner or finding more resource efficient ways of producing our products. To provide a forum for innovation and to stimulate the exchange of new ideas, technical networks of subject matter experts were established in The networks gather for multi-day meetings where they explore solutions to technical problems and think creatively about performance improvement opportunities that can help our sites operate more efficiently, consistently and safely. In addition to these technical networks, we also have longestablished networks of safety and environmental practitioners that meet regularly to discuss SHE related issues and opportunities of common interest to the sites. The Nyrstar Excellence Awards were launched in 2010 to promote a culture of excellence and provides an opportunity to acknowledge and reward innovative new solutions. The Excellence Awards centre around our strategic priorities to Keep Our Word, Transform for Tomorrow and Unleash Our Potential. Image: Nyrstar Contonga Mine in Peru. 12 of 56

13 Strategy and Management Approach Workforce Health and Safety The first element of the Nyrstar Way is to Prevent Harm. We are committed to safe production and to the proactive management of risks facing our people. Our Health & Safety vision is to provide a work environment where all hazards are effectively identified and controlled, and where each employee takes responsibility for their own safety and that of their colleagues. We aim to create a culture where every leader, manager, employee and contractor has clear accountabilities and understands their role and responsibilities for helping to create and maintain a safe and healthy workplace. We believe that every work-related illness and injury is preventable and our goal is to achieve world class health and safety performance across all our mines and smelters by Our strategy encompasses three interrelated elements: Excellence in Integrated Management System; Excellence in Hazard Management; and a World-Class Health & Safety Culture Key Performance We are pleased to report that no employees or contractors lost their lives or were seriously injured while working for Nyrstar in However, our lost time injury frequency rate (LTIR) remained flat and our recordable injury frequency rate (RIR) increased slightly in 2014 reflecting a challenging year in our Mining segment. Our Metals Processing segment closed the year with the lowest LTIR and Days Away from Work, Restricted Work or Transfer (DART) since Nyrstar was founded. Further information about our health and safety performance in 2014 is provided on page 34. Critical Incident Prevention Programme As we seek to operate with zero harm, a major focus is to prevent fatalities and serious long term disabling injuries. As part of this focus, in 2013 we launched the Nyrstar Life Saving Rules which prescribe non-negotiable requirements in relation to a set of key risks relevant to our operations. In 2014, this initiative was further expanded and developed into a comprehensive fatality prevention programme referred to as The Zero Program. In the Mining segment, the programme was complemented by a set of Golden Rules focusing on fatal risks of particular relevance for the mining operations. Further information about our fatality prevention programmes is provided on page 29. Behavioural Safety We recognise that superior safety performance does not only require strong systems and risk management but also a positive culture in which everyone is committed to their own safety and the safety of their colleagues. This requires a culture of trust, good communication, learning and innovation underpinned by good leadership and clear roles and accountabilities. In the Mining segment, the Leadership Development Programme introduced in 2014 (see page 11) provides a key vehicle for strengthening our safety leadership throughout the operations. Whilst it was too early for the results of the programme to become evident already in our 2014 data, its continued rollout and implementation in 2015 is expected to have a positive impact on the safety performance at each site. Prevent harm The Zero Program encompasses a series of activities including identification and review of critical incident scenarios, first line supervisor leadership training, audit and self-assessments and further embedding of the Life Saving Rules. In the Metals Processing segment, behavioural safety initiatives commenced in 2012 were further progressed through a safety intervention programme. As part of this programme, more than 1,500 unsafe acts were identified, stopped, investigated and addressed across our zinc smelters in The programme was a key contributing factor in the zinc smelters achieving their best ever RIR performance at 6.8 in Image: Blue Spot Awareness Light developed as part of the Critical Incident Prevention Programme. The light is fitted on fork lifts operating in loading areas and is used to warn pedestrians and other vehicles of approaching traffic. 13 of 56

14 Strategy and Management Approach Workforce Health and Safety Occupational Health Occupational health risks facing our employees arise from the physical and chemical hazards inherent in our work environment as well as the nature of activities undertaken by our employees and contractors. Priority areas of attention include occupational lung disease, musculoskeletal injuries, dermatologic conditions and noise-induced hearing loss. Our SHEC Management Framework sets out clear commitments and requirements regarding the occupational health standards to be met and the management systems and processes that need to be in place to ensure we meet and maintain these standards. This includes: Occupational health hazard identification, risk evaluation, and control; Health hazard communication and comprehension; Rehabilitation; and Promoting employee health and wellness. A major focus for the business continues to be the reduction of workplace noise. Workplace noise is the cause of hearing loss, creates physical and psychological stress, and contributes to accidents by making it difficult to communicate. In 2014, the Hearing Conversation Programme in the Metals Processing segment was significantly improved through the introduction of a number of industry best practices. For example, this included provision of custom-molded ear plugs, completion of personal exposure measurements for all positions, and yearly audiogram tests for all employees exposed to noise levels above 85dB(A). In addition, a research programme regarding otoacoustic emission measurements was initiated in collaboration with the University of Gent. View of the bagging plant with the operators platform at the rear. Health Improvements on a New Bagging Plant at Port Pirie A new fume bagging plant was built in the Kilns area at Port Pirie. A Health & Safety Project review was completed at the design phase in order to identify technical solutions related to the existing noise exposure, dust (lead) exposure and heat stress. As a result of the review three major actions were proposed in order to reduce the physical and chemical exposures: An evaporative air-conditioner was installed across the operator platform. This has improved the comfort of the operator during hot weather and it has reduced the risk of heat stress. An acoustic panel was placed above the operator platform which also blocks the entering of lead bearing dust from external emission sources. Noise exposures are now below the action limit and hearing protection is not mandatory. The sequencing of the extraction system was also reviewed and refined, reducing emissions and personal exposure. This has reduced the levels of lead in blood of these operators. Image: Nicole Curinckx, company nurse at Balen, delivering training in cardiopulmonary resuscitation (CPR). 14 of 56

15 Strategy and Management Approach Environment We seek to conduct our business in a way that continuously improves the efficiency of our production processes, protects ecological functions and reduces the environmental footprint of our operations. Our environmental strategies are formulated in close cooperation with external stakeholders and their execution are integrated into operational decision making and management processes. Minimising environmental impacts represents one of the principal challenges for the mining and metals industry. Similar to our peers, the environmental aspects demanding our greatest attention relate to water, energy and climate change, emissions to air, waste, biodiversity and land management, and material stewardship. Recognising the importance of environmental performance to our business, we take the management of these environmental issues very seriously and responsible environmental stewardship is integrated into our business planning, management systems and day-to-day operational decision making. Nyrstar s approach to environmental management starts with The Nyrstar Way which provides the foundation for the company values and culture we want to foster. Of particular relevance to environment, the Nyrstar Way requires us to Prevent Harm establishing an imperative for our people to act and take decisions with a view to minimising Image: Myra Falls near the Nyrstar Myra Falls mine in British Columbia, Canada. The mine s location inside the Strathcona Provincial Park heightens the importance of robust environmental and community management programmes. environmental impacts. Further, our Environmental Policy sets out our environmental management principles and commitments that all operations must respect and follow. All Nyrstar sites are required to implement environmental management systems (EMSs) in alignment with the Nyrstar SHEC Management Elements (see page 9). The EMSs help to drive continuous improvement in environmental performance by ensuring environmental impacts are identified, understood, controlled and subject to regular monitoring and review. The systems implemented at Nyrstar s smelters are also certified to the ISO environmental management system standard. In our Mining segment, the Tennessee Mines complex achieved certification to ISO and several of our other mines are working towards certification in coming years. Water Nyrstar s business is dependent on water and our operations both take and discharge large volumes of water. Water supply and quality are also of utmost importance to the communities in which we operate and to society at large. Therefore, we seek to minimise our use of water, avoid impacting the quality of freshwater resources and ensure a fair, equitable and sustainable use of these resources in cooperation with other users and stakeholders. Our efforts in this regard are governed by our environmental performance standards which specify requirements for the management and protection of water resources. 15 of 56

16 Strategy and Management Approach Environment In 2014 we launched a corporate initiative involving the development of integrated water management plans at all our mines. The process of developing the plans follows a step-wise approach, key to which is the development of site-wide water balances that identify all inputs, uses and discharges of water. The initiative is supported by a water management standard and various templates, tools and reference guides. The plan development work stretches across 2014 and 2015 and is underpinned by interim targets and measures tracked through the sites balanced business plans. Image: Wastewater treatment plant at Nyrstar s Overpelt site in Belgium. Energy and Climate Change Our operations are significant users of energy. Energy costs represent approximately 30% of our operating costs but for our smelters this number typically exceeds 40%. Given the energy intensive nature of our operations, achieving continuous improvement in energy efficiency and reducing greenhouse gas emissions are top priorities. As our smelters account for around 90% of the group energy consumption, all smelters have formal energy efficiency programmes and ways to reduce the carbon footprint of the operations are continuously investigated, analysed and pursued. Examples of energy efficiency initiatives implemented in 2014 included installation of more efficient air compressors and lighting at Clarksville and current efficiency improvement projects at Budel. Image: Left - Reflections on the water in Canal de la Deule, located adjacent to the Nyrstar Auby smelter in France. The canal connects the site to the seaports of Calais and Antwerp. Carbon risks associated with greenhouse gas emission regulations and increasing energy costs are material to our business and several of our sites operate in jurisdictions in which legislation to reduce and monitor greenhouse gases is enforced or being considered. We engage actively with governments to help inform public policy and legislation on energy pricing and carbon emissions. We do this through direct dialogue with government officials, institutions and subject matter experts, by participating in multi-stakeholder consultations or via industry associations, most importantly Eurometaux. Over the long term, our operations also face climate change risks associated with physical impacts such as extreme weather events and availability of water. Working together with governments, communities and non-governmental organisations we strive to understand how these changes may affect us and to devise appropriate response and adaptation strategies. Emissions to Air Our mining and smelting operations generate air emissions that have the potential to affect nearby communities and the environment. At our smelters, key emission constituents of concern are nitrogen oxides (NOX), sulphur dioxide (S02) and particulate containing zinc, lead and other metals. Emissions to air from our mining operations mainly comprise particulate matter (dust) from ore handling and storage, vehicle movements on unpaved roads and wind-blown dust from tailing beaches. We use a variety of measures to control air emissions, including abatement technologies such as filters, electrostatic precipitators and scrubbers; regular watering and spraying of dusty areas (sometimes using binders); enclosure of dusty activities; and process monitoring. It should be noted that since all our mines are underground operations, emissions from blasting, ore handling and transport and other mining activities are generally less significant from an environmental perspective. 16 of 56

17 Strategy and Management Approach Environment Update on Lead Emissions at Port Pirie In our 2013 sustainability report we reported on the efforts we are making to reduce leadcontaining emissions to air from the Port Pirie smelter in Australia. As mentioned in that update, the aging production technology currently installed on site presents challenges with respect to the control of lead emissions to air. The open layout of the sinter plant and associated material handling circuits represents a particular concern as fugitive emissions from these installations are hard to prevent and control. Airborne lead in Port Pirie is monitored daily with 12 High Volume samplers situated throughout the community. Two of these samplers, located at Pirie West Primary School (PWPS) and Oliver Street, have an EPA compliance limit of 0.5 µg/m 3. As reported in the 2013 sustainability report, the 2013 compliance results at these two stations were 0.5 µg/m 3 and 0.4 µg/m 3, respectively. Due to the many improvement actions implemented in 2014, we are very pleased to report that the average lead in air concentrations for 2014 were reduced by 40% relative to 2013 and that for many of the monitoring stations the 2014 results represented the best on record. This is a significant achievement which was accomplished through focused management attention across a range of initiatives, areas and disciplines. Examples of key focus areas include material storage and handling, roadway maintenance, high wind protocols, ship unloading, process control, equipment maintenance, housekeeping, operating standards and emissions monitoring. Recognising that improved emission performance requires involvement from all levels across the site, significant efforts were also put into training of operators and into establishing clear responsibilities for management of emissions. The lead in air improvement measures are undertaken in close consultation with the South Australia Environment Protection Authority (EPA) and several of the initiatives are included in an Environmental Improvement Programme for Lead Emissions to Air approved by the EPA. The lead in air improvements achieved in 2014 lay the foundation for the step change reductions in lead emissions anticipated from the Port Pirie Redevelopment Project. The project includes the replacement of the sinter plant with an oxidation furnace, thereby addressing the most significant source of lead-containing air emissions on site. Redevelopment construction activities were commenced in 2014 and the Project is on schedule for commissioning in Further information about the Port Pirie Redevelopment Project is provided on pages Image: Students from Solomontown Primary School, Port Pirie. 17 of 56

18 Strategy and Management Approach Environment Waste Biodiversity and Land Management Our operations generate significant amounts of solid and liquid wastes, most of which is classified as non-hazardous. Key process wastes produced from our smelters include iron-containing slags and sludge from wastewater treatment. The most important waste stream generated at our mines is tailings (typically consisting of finely crushed rock minerals, water and small amounts of process chemicals) from the ore processing facilities. Whilst our mines also produce waste rock, the majority of this waste is disposed underground where it originated and where it presents less environmental risk. The operations also generate smaller quantities of non-mineral wastes, including both hazardous and non-hazardous materials. Systems and processes for the responsible management of waste are in place at all sites. Tailings generated at our mines are placed in designed storage facilities which typically comprise one or several dams or embankments. Nyrstar is currently responsible for around 20 dam structures, including two small hydropower dams at Myra Falls. As per our environmental performance standards, operating, maintenance and surveillance (OMS) manuals must be maintained for all active TSFs and such manuals are in place or under development at all mines. In order to assure the integrity of our tailing dams, a Nyrstar Dam Safety Review Committee was launched in Further information about the activities of the Review Committee and dam safety reviews completed in 2014 is provided on page 30. Mining and metals processing operations require large areas of land. With regards to our mining activities, our use of the land is temporary so we aim to be responsible stewards of the land that we operate on. We work proactively to minimise the environmental footprint of our activities, protect sensitive habitats and to conserve biodiversity values and landscape functions in the locations where we operate. Baseline biodiversity studies are completed prior to the development of new land or activities and biodiversity management plans are put in place to protect sensitive areas and species. Most of our mines also have established processes for ongoing monitoring of environmental effects both within and outside the footprint of the operations. We are committed to progressively rehabilitating land that is no longer needed for production purposes and to fully reclaim areas after operations have been concluded. To support this commitment, all our mines are required to develop, implement and maintain closure plans that outline intended post-closure land uses, key closure concepts and estimated closure costs. The closure plans help to ensure that rehabilitation aspects are considered in operational planning and that sufficient funds are allocated for closure and postclosure monitoring. Nyrstar also has a portfolio of non-operational legacy sites, inherited through acquisitions, that require additional rehabilitation works in order to be fully closed. We recognise that an important part of maintaining our social licence to operate depends on our track record of addressing and mitigating the environmental impacts of our legacy sites, regardless of their ownership history. To this end, we work diligently to rehabilitate and restore the land to make it available for other uses. Stakeholder consultation and engagement form an integral part of all our biodiversity and land management activities. By engaging with local communities, land owners and other parties we seek to balance our needs with those of other users and to obtain consensus on preferred closure and land management strategies. Image: Greenhouse at the El Mochito mine, used to cultivate plants supporting reclamation and reforestation activities at the mine. 18 of 56

19 Strategy and Management Approach Environment Material Stewardship The metals that we produce play a central role in the development and improvement of our society and are used in many vital products and services, from vehicles and buildings to mobile phones and agricultural fertilisers. By focusing on material stewardship we seek to extract and process our commodities in a responsible and efficient manner and to promote the sustainable use, recycling and eventual disposal of our products. In line with our strategic mission to capture the maximum value inherent in mineral resources, we are investing in technology that allows us to maximise the extraction of valuable metals from our feed materials, by-products and residue materials. By taking advantage of by-product synergies we are able to decrease the amount of materials disposed as waste and to reduce the need for virgin-source materials. Central to this strategy is the redevelopment of Port Pirie into an advanced metals recovery and refining facility as well as a number of other growth projects identified as a result of our recently completed Smelting Strategic Review. Further information about these projects are presented in the In Focus sections on pages and 26-27, respectively. Our material stewardship responsibilities go beyond the extraction and production activities that we directly manage. They also concern the safe and sustainable use and disposal of our products. Since our metals are sold in a global market place, we believe that our product stewardship objectives are best addressed in cooperation with other stakeholders such as industry organisations, governments and academic institutions. In 2014, we held memberships in several key industry associations which engage actively on product stewardship and sustainability issues including the International Zinc Association (IZA), the International Lead Association (ILA), Eurometaux and the Mining Association of Canada (MAC). All our products have material safety data sheets that provide information on product composition, hazards to human health and the environment, appropriate handling and storage, and emergency response. Many of our products are also subject to the European Union s regulation on the Registration, Evaluation and Authorisation of Chemicals (REACH). All relevant Nyrstar products and substances havebeen registered and evaluations have been commenced for some substances. Nyrstar is a member of the REACH consortia for zinc, lead, cadmium and indium, allowing us to share costs and information for substance registration and evaluation with other producers. No incidents of non-compliance with regulations and voluntary codes concerning product health and safety impacts, product information and labelling, or concerning the use of our products occurred in Image: Zinc ingots produced at the Nyrstar Budel smelter awaiting delivery. 19 of 56

20 Strategy and Management Approach Community Engagement and Livelihoods Gaining and protecting our social licence to operate is intrinsically linked to the way we engage with our communities, regulators, suppliers, customers and other key stakeholders. Our aim is to be a welcome and valued member of the communities in which we operate. We seek to build long term relationships founded on trust and honesty, and by respecting fundamental human rights wherever we operate. We focus on creating shared value for our host communities and other stakeholders by developing a good understanding through dialogue, research and assessment of their concerns, needs and aspirations and integrating these into our decisions and day-to-day operations. The table at right outlines some of the key risks associated with our community involvement activities and our approaches to addressing these risks. Engagement The Nyrstar Way establishes the values and behaviours that we must apply in our dealings with local communities and other key stakeholders. This includes a commitment to Keeping Our Word, Preventing Harm, Being Open and Honest and Creating Value. It applies to all employees and contractors working for Nyrstar. Our Safety, Health, Environment and Community (SHEC) Management Framework sets out the processes for stakeholder engagement, communication and consultation that must be implemented at all Nyrstar sites. Site application of these processes focus on understanding and addressing the social risks and opportunities that are associated with our operations and the communities in which we operate. As per the Framework, all sites have stakeholder engagement plans that are regularly revised to reflect the current social context, risks, opportunities and needs of the individual sites. All Nyrstar operations have established processes for recording community feedback, whether positive or negative. In 2014, a total of 56 community complaints were received. The majority of the complaints related to noise and air quality. Received complaints are recorded, investigated and responded to in accordance with established protocols. Community Development We actively seek to help the local communities where we operate to thrive and benefit from our presence. We preferentially source from local suppliers and help them to build capacity to take on bigger and more complex contracts. We help build local capabilities and know-how and, where we can, we work in collaboration with local stakeholders (governments, education boards, local medical providers, etc.) to support the improvement of education and local community health. In the past year, our community programmes supported initiatives related to children s health, educational opportunities, habitat & wildlife protection, cultural and sporting events. Image: Children participating in the I learn by playing programme implemented by the Right to Play organisation in the San Mateo district near Nyrstar s Coricancha mine (Peru). Nyrstar has supported Right to Play since Overview of Community Management Risks Risk Development of dependence on Nyrstar mines due to past practice of providing large volume of financial contributions to communities Increased financial and tax burdens that reduce level of support and social investment Reduced lack of confidence and trust between local communities and Nyrstar Lack of state financial and infrastructure support create dependence on Nyrstar due to unsatisfied basic needs Risk Management Approach Transition from financial contributions to sustainable development programmes that increase selfsustainability of local communities Increase the levels of partnerships with local and federal institutions; source additional forms of funding (e.g. federal grants) for ongoing programmes and initiatives Maintain presence in communities and implement formal communication processes ensuring frequent and meaningful interactions Develop strong alliances with government and NGO institutions to ensure support and services are provided by the appropriate organisations 20 of 56